Alternative Dispute Resolution Hong Kong International Arbitration Centre 29 December 2004

Alternative Dispute ResolutionAlternative Dispute Resolution Hong Kong International Arbitration CentreHong Kong International Arbitration Centre

29 December 200429 December 2004

OverviewOverview Origins and History of the Hong Kong Origins and History of the Hong Kong

International Arbitration Centre.International Arbitration Centre. The growing need for arbitration flowing from The growing need for arbitration flowing from

increasing involvement by Hong Kong and increasing involvement by Hong Kong and Overseas Companies in the Mainland Market.Overseas Companies in the Mainland Market.

Arbitration in Hong Kong and Mainland China.Arbitration in Hong Kong and Mainland China. Enforcement of settlements in Hong Kong and Enforcement of settlements in Hong Kong and

China.China. The role of the Hong Kong Institute of The role of the Hong Kong Institute of

Arbitrators and the Chartered Institute of Arbitrators and the Chartered Institute of Arbitrators (East Asia Branch).Arbitrators (East Asia Branch).

Business DisputesBusiness Disputes

Should commercial disputes be a Should commercial disputes be a hindrancehindrance to to your company’s success.your company’s success.

How should you How should you prepareprepare for the worst. for the worst. What What adviceadvice and and guidanceguidance is available. is available. How can you How can you proactively manageproactively manage your disputes your disputes

that could substantially save you in that could substantially save you in unnecessary costs and time. unnecessary costs and time.

Understanding the various dispute resolution Understanding the various dispute resolution mechanisms that are available in market place mechanisms that are available in market place can assist you in managing your potential can assist you in managing your potential disputes in an effective and efficient manner disputes in an effective and efficient manner while at the same time while at the same time minimizing your minimizing your exposure to potential risksexposure to potential risks..

Common Ways to Resolve Common Ways to Resolve Disputes in SocietyDisputes in Society

AvoidanceAvoidance

NegotiationNegotiation

LitigationLitigation

ViolenceViolence

ArbitrationArbitration

AdjudicationAdjudication

MediationMediation

The Advantages of Arbitration

FlexibilityFlexibility in Proceedings in Proceedings

ConfidentialityConfidentiality of Proceedings of Proceedings

The The Speed Speed of Resolutionof Resolution

Low CostLow Cost relative to Litigation relative to Litigation

LegallyLegally Binding Binding Nature Nature

International International EnforceabilityEnforceability

ExpertiseExpertise of Arbitrator of Arbitrator

Disadvantages of ArbitrationDisadvantages of Arbitration A major weakness of the arbitral process is A major weakness of the arbitral process is

the the limited powerslimited powers which the arbitral tribunal which the arbitral tribunal may exercise.may exercise.

Another perceived drawback of the arbitral Another perceived drawback of the arbitral process lies in the fact that, in general, it is process lies in the fact that, in general, it is not possible to bring not possible to bring multi-partymulti-party disputes disputes together before the same arbitral tribunal. together before the same arbitral tribunal. Unlike a Court of Law, an arbitral tribunal Unlike a Court of Law, an arbitral tribunal generally has generally has no powerno power to order to order consolidation consolidation of actionsof actions..

If the Arbitrator is an expert within a specified If the Arbitrator is an expert within a specified field, he/she may not have the requisite field, he/she may not have the requisite expertise when the dispute hinges on difficult expertise when the dispute hinges on difficult points of law.points of law.

The The doctrine of precedentdoctrine of precedent does not apply. does not apply. Each case is decided on its merits; and is Each case is decided on its merits; and is therefore no guide to future similar cases.therefore no guide to future similar cases.

Types of Arbitration ProceedingsTypes of Arbitration ProceedingsInstitutionalizedInstitutionalizedAn institutional arbitration is one which is An institutional arbitration is one which is administeredadministered by one of the many specialist by one of the many specialistarbitral institutions under its arbitral institutions under its own rules ofown rules ofArbitrationArbitration..

Ad-hocAd-hocAd-hoc arbitrations often take place under theAd-hoc arbitrations often take place under theprovisions of a submission agreementprovisions of a submission agreement which whichitself often establishes the arbitral tribunal anditself often establishes the arbitral tribunal andsets out the procedural rules upon which thesets out the procedural rules upon which theparties have agreed. An ad-hoc arbitrationparties have agreed. An ad-hoc arbitrationarises under an arises under an arbitration clausearbitration clause..

EnforcementEnforcement The New York Convention on the Recognition and

Enforcement of Foreign Arbitral Awards lays down a detailed framework for the recognition and enforcement of arbitration awards.

Over 140 countries are signatories to this convention

HK adopted the convention on 21 April 1977 by virtue of the United Kingdom’s accession on HK’s behalf. China is also a signatory to the convention and applied it to HK with effect from 1 July 1997

HK Courts recognize and enforce arbitration awards made in countries which are signatories to

the Convention in accordance with the terms of the Convention

Arbitration awards are enforceable in the Mainland of China and vice versa.

Why Arbitrate in Hong KongWhy Arbitrate in Hong Kong The World’s Freest EconomyThe World’s Freest Economy The Rule of LawThe Rule of Law A Free and Open SocietyA Free and Open Society Accountable Government Accountable Government International Business HubInternational Business Hub International Financial CentreInternational Financial Centre International Arbitration and Dispute Resolution International Arbitration and Dispute Resolution

CentreCentre Update Arbitration Law Update Arbitration Law Available ExpertiseAvailable Expertise

( Including 3 Universities offering Postgraduate studies in Arbitration and ( Including 3 Universities offering Postgraduate studies in Arbitration and Alternative Dispute Resolution courses)Alternative Dispute Resolution courses)

StatisticsStatistics

HKIAC 2003 StatisticsHKIAC 2003 Statistics

ArbitrationArbitration MediationMediation

ConstructionConstruction 137137 55

CommercialCommercial 8080 22

ShippingShipping 2828 00

Joint VentureJoint Venture 77 00

OthersOthers 33 00

CommunityCommunity 00 11

TotalTotal 255255 88Domain NamesDomain Names 3232 N/AN/A


Of Of 255 Arbitrations255 Arbitrations (excluding Domain Names) (excluding Domain Names)

198 198 casescases involve involve Hong KongHong Kong and and other other Countries.Countries.

3535 cases cases involve involve non-Hong Kongnon-Hong Kong parties. parties. 2222 cases involve Hong Kong parties. cases involve Hong Kong parties.


Of the Of the 198198 cases cases involving Hong Kong Partiesinvolving Hong Kong Parties:: - 18 cases from HK and Mainland of China.- 18 cases from HK and Mainland of China. - 180 cases from HK and other countries. - 180 cases from HK and other countries. - 166 cases involve contracts performed in HK.- 166 cases involve contracts performed in HK. - 32 cases involve contracts performed- 32 cases involve contracts performed elsewhere.elsewhere.

- Disputed amounts range from - Disputed amounts range from HK$ 61,000HK$ 61,000 to over to over HK$152 millionHK$152 million..


Of the Of the 3535 cases involving cases involving non-Hong Kong non-Hong Kong PartiesParties::

- 14: Mainland of China/ Mainland of China- 14: Mainland of China/ Mainland of China - 1: United Kingdom/ Mainland of China - 1: United Kingdom/ Mainland of China - 1: Australia/United States of America- 1: Australia/United States of America - 1: Singapore/Mainland of China- 1: Singapore/Mainland of China - 5: Korea/Japan- 5: Korea/Japan - 9: United States of America/Mainland of China- 9: United States of America/Mainland of China - 3 : Korea/Korea- 3 : Korea/Korea - 1: Netherlands/Mainland of China- 1: Netherlands/Mainland of China

Hong Kong International Arbitration CentreHong Kong International Arbitration Centre

The Hong Kong International Arbitration Centre an The Hong Kong International Arbitration Centre an independent non-profit making limited by guaranteeindependent non-profit making limited by guarantee was was established in established in 19851985 to provide advisory and support services to provide advisory and support services for the resolution of local and international disputes by for the resolution of local and international disputes by mediation and arbitration.mediation and arbitration.

Twenty-six Council MembersTwenty-six Council Members – Board of Directors. – Board of Directors. Seven Full-time staff.Seven Full-time staff. 300 international and local arbitrators of experience and 300 international and local arbitrators of experience and

distinction.distinction. An active mediation body – An active mediation body – Hong Kong Mediation CouncilHong Kong Mediation Council, a , a

division of the HKIAC.division of the HKIAC. Superb Superb facilities facilities to conduct Arbitrations and other forms of to conduct Arbitrations and other forms of

dispute resolution procedures.dispute resolution procedures. Publication of various rules and procedures for arbitrationsPublication of various rules and procedures for arbitrations in in

Hong Kong including the Securities Arbitration Rules and Hong Kong including the Securities Arbitration Rules and Small- Claims/Documents-Only Procedures.Small- Claims/Documents-Only Procedures.

HKIAC StructureHKIAC Structure

HKIAC ServicesHKIAC Services Provides a Provides a free information service on dispute resolutionfree information service on dispute resolution.. Provides informationProvides information on arbitration law and procedure relating to on arbitration law and procedure relating to

international arbitrations in Hong Kong.international arbitrations in Hong Kong. Promotes Hong Kong internationallyPromotes Hong Kong internationally, as the ideal venue for dispute , as the ideal venue for dispute

resolution services.resolution services. Authority to appoint arbitratorsAuthority to appoint arbitrators under both the domestic and under both the domestic and

international regimes of the Arbitration Ordinance.international regimes of the Arbitration Ordinance. Authority to decide on the number of arbitratorsAuthority to decide on the number of arbitrators under the international under the international

regime of the Arbitration Ordinance.regime of the Arbitration Ordinance. Accredits mediatorsAccredits mediators for use on the Court Annexed Family Mediation for use on the Court Annexed Family Mediation

Scheme.Scheme. Administers the mediation servicesAdministers the mediation services for Hong Kong Government for Hong Kong Government

contracts.contracts. Administer gTLDs and ccTLDsAdminister gTLDs and ccTLDs as approved by ICANN under the as approved by ICANN under the

organisation of Asian Domain Name Dispute Resolution Centre – organisation of Asian Domain Name Dispute Resolution Centre – www.adndrc.orgwww.adndrc.org ( a joint venture between CIETAC and HKIAC), HKDNR ( a joint venture between CIETAC and HKIAC), HKDNR (to handle (to handle .hk disputes.hk disputes) and CNNIC (to handle ) and CNNIC (to handle .cn disputes.cn disputes).).

Administer rulesAdminister rules for the Securities and Futures Commission and the for the Securities and Futures Commission and the Hong Kong Society of Accountants WebTrust Programme - a third party Hong Kong Society of Accountants WebTrust Programme - a third party arbitration framework for the use and adoption by on-line merchants to arbitration framework for the use and adoption by on-line merchants to handle consumer disputes on-line .handle consumer disputes on-line .

Hong Kong Mediation CouncilHong Kong Mediation Council The The Hong Kong Mediation CouncilHong Kong Mediation Council (HKMC) was set up within (HKMC) was set up within

Hong Kong International Arbitration Centre (HKIAC) in January Hong Kong International Arbitration Centre (HKIAC) in January 1994 to promote the development and use of mediation as a 1994 to promote the development and use of mediation as a method of resolving disputes. The HKMC is a method of resolving disputes. The HKMC is a division of the division of the HKIACHKIAC and was previously known as the Mediation Group. and was previously known as the Mediation Group.

The Council is run by a committee who are responsible for The Council is run by a committee who are responsible for activity co-ordination and who represent mediation interest in a activity co-ordination and who represent mediation interest in a wide variety of areas. In addition, there are wide variety of areas. In addition, there are specialist sub-specialist sub-committeescommittees who concentrate their mediation activities in who concentrate their mediation activities in specialist areas namely commercial, community, construction specialist areas namely commercial, community, construction and family. and family.

The Mediation Council aims to The Mediation Council aims to promote the use of mediation and promote the use of mediation and

other forms of ADRother forms of ADR, encourage collaboration amongst its , encourage collaboration amongst its members and with similar professional bodies, facilitate members and with similar professional bodies, facilitate exchange of information and provide education/training on ADR.exchange of information and provide education/training on ADR.

Hong Kong Institute of ArbitratorsHong Kong Institute of Arbitrators Hong Kong Institute of Arbitrators (HKIArb) was set up in Hong Kong Institute of Arbitrators (HKIArb) was set up in SeptemberSeptember

19961996 by a group of Hong Kong professionals interested in arbitration, by a group of Hong Kong professionals interested in arbitration, mediation and other kinds of dispute resolution. The Institute mediation and other kinds of dispute resolution. The Institute enjoys enjoys charitable status and is non-profit makingcharitable status and is non-profit making. It is funded by annual . It is funded by annual membership fees and is financially independent.membership fees and is financially independent.

The administration of the Institute is conducted through a Council The administration of the Institute is conducted through a Council comprising of professionals of different nationalities and with a comprising of professionals of different nationalities and with a diversity of skills and experience. The Council, which is elected diversity of skills and experience. The Council, which is elected annually, has a number of committees covering such areas as annually, has a number of committees covering such areas as membership, finance, institutional development, education and membership, finance, institutional development, education and training programmes.training programmes.

A main objective of the Institute is to A main objective of the Institute is to promote arbitration and other promote arbitration and other alternative methods of dispute resolution (ADR) in Hong Kongalternative methods of dispute resolution (ADR) in Hong Kong. . HKIArb is involved in the HKIArb is involved in the training of arbitrators and mediatorstraining of arbitrators and mediators, the , the setting of setting of appropriate standardsappropriate standards of conduct for arbitrators and of conduct for arbitrators and mediators in Hong Kong and mediators in Hong Kong and law reformlaw reform relevant both to arbitration relevant both to arbitration and mediation. It is working to forge ties with other organizations and mediation. It is working to forge ties with other organizations involved in arbitration and ADR, particularly those within China and involved in arbitration and ADR, particularly those within China and in the Asia region. in the Asia region.

Chartered Institute of Arbitrators Chartered Institute of Arbitrators (East Asia Branch)(East Asia Branch)

The Chartered Institute of Arbitrators (CIArb) was The Chartered Institute of Arbitrators (CIArb) was founded in founded in 19151915 with the aim of promoting Arbitration with the aim of promoting Arbitration as an alternative method of dispute resolution to as an alternative method of dispute resolution to litigation. It was incorporated in 1925, granted a Royal litigation. It was incorporated in 1925, granted a Royal Charter in 1979 and charitable status in 1990.There Charter in 1979 and charitable status in 1990.There are are branchesbranches of the Institute throughout the United of the Institute throughout the United Kingdom and overseas. The Kingdom and overseas. The East Asia BranchEast Asia Branch, , previously known as The Hong Kong Branch, was previously known as The Hong Kong Branch, was formed in 1972 which covers geographical area of formed in 1972 which covers geographical area of China, Thailand, Vietnam, Philippines, Korea, China, Thailand, Vietnam, Philippines, Korea, Singapore and Indonesia. Changes to the Royal Singapore and Indonesia. Changes to the Royal Charter in 1999 means that the Institute now actively Charter in 1999 means that the Institute now actively encourages the encourages the use of ADRuse of ADR to achieve the early and to achieve the early and private settlement of disputes.private settlement of disputes.

Chartered Institute of Arbitrators Chartered Institute of Arbitrators (East Asia Branch)(East Asia Branch)

The objectives of the Branch are to The objectives of the Branch are to provide a regional provide a regional organizationorganization for Members of the Institute who are resident for Members of the Institute who are resident in East Asia generally. The purpose is to in East Asia generally. The purpose is to promote, promote, encourage and facilitateencourage and facilitate the practice of settlement of the practice of settlement of disputes by arbitration and other means of dispute disputes by arbitration and other means of dispute resolution, and to resolution, and to support and promote the status and support and promote the status and interests of the Chartered Institute of Arbitratorsinterests of the Chartered Institute of Arbitrators. .

The East Asia Branch is committed to providing The East Asia Branch is committed to providing education and training in areas of law and practice education and training in areas of law and practice relating to arbitrationrelating to arbitration, holding demonstration arbitrations, , holding demonstration arbitrations, disseminating useful information connected with disseminating useful information connected with arbitration and protecting the public interest in relation to arbitration and protecting the public interest in relation to the conduct of arbitrations as a means of resolving the conduct of arbitrations as a means of resolving disputes.disputes.

QuoteQuote

““With a good man in the saddle, the unruly With a good man in the saddle, the unruly horse can be kept in control. It can jump over horse can be kept in control. It can jump over obstacles. It can leap the fences put up by obstacles. It can leap the fences put up by frictions and come down on the side of justice.”frictions and come down on the side of justice.”

Enderby Town Football Club Ltd. V. The Football Association Ltd. [1971] AC 591Enderby Town Football Club Ltd. V. The Football Association Ltd. [1971] AC 591

By Lord DenningBy Lord Denning

Another QuoteAnother Quote

World Peace, like community peace, does not World Peace, like community peace, does not

require that each man love his neighbor – it require that each man love his neighbor – it

requires only that they live together with mutual requires only that they live together with mutual

tolerance, submitting their disputes to a just tolerance, submitting their disputes to a just and and

peaceful settlement.peaceful settlement.

By John F. KennedyBy John F. Kennedy

Hong KongHong Kong the City of Life the City of Life

The City where East greets West that The City where East greets West that offers you a truly “offers you a truly “Can-doCan-do” attitude ” attitude which ultimately leads you towards which ultimately leads you towards

success year after yearsuccess year after year

Your Partner in AsiaYour Partner in Asia

Should you have any questions Should you have any questions please feel free to discuss them now or please feel free to discuss them now or

refer to the HKIAC website atrefer to the HKIAC website at

www. hkiac.org

38/F, Two Exchange Square Central, Hong Kong38/F, Two Exchange Square Central, Hong Kong

Tel 852 25252381 Fax 852 25242171Tel 852 25252381 Fax 852 25242171

E-mail: [email protected]

Thank YouThank You

Hong Kong International Arbitration CentreHong Kong International Arbitration Centre

3838thth Floor, Two Exchange Square Floor, Two Exchange Square

Central Central

Hong KongHong Kong

www.hkiac.orgwww.hkiac.org

adradr@@hkiachkiac.org.org

Tel 852 25252381Tel 852 25252381

Fax 852 25242171Fax 852 25242171